UPDATED: Preliminary Highlights from the Complete report now available here.

NEW YORK, Oct. 1, 2009–Standard & Poor’s Ratings Services said today it assigned its issue-level and recovery ratings to the proposed $100 million senior secured incremental term loan being issued by Zuffa LLC. The loan was rated ‘BB-‘ (at the same level as the corporate credit rating on the company) with a recovery rating of ‘4’, indicating our expectation of average (30% to 50%) recovery for lenders in the event of a payment default.

At the same time, we revised our recovery rating on Zuffa’s existing senior secured credit facilities to ‘4’ from ‘3’.

We also affirmed our issue-level rating on these loans at ‘BB-‘ (at the same level as the ‘BB-‘ corporate credit rating on the company), in accordance with our notching criteria for a ‘4’ recovery rating. (To see the complete recovery analysis, see Standard & Poor’s recovery report on Zuffa LLC, to be published as soon as possible on RatingsDirect following this report.)

Net proceeds from the proposed incremental term loan will be used to repay the outstanding balance under the company’s revolving credit facility and to fund a dividend to the owners. Leverage will increase moderately as the result of this transaction. However, our rating affirmation reflects solid operating results in recent quarters given consistently strong EBITDA margins and continued success in improving the profitability of international operations, which meaningfully improved credit measures. Pro forma for the proposed transaction, credit measures remain in line with the current rating.

Complete ratings information is available to RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor’s public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Find a Rating.

[…] to the big blue chip brands or big headed athletes. Me thinks this is pretty ironic. Zuffa recently announced a 100M loan and Dana White is doing this very interview from a finance convention. A finance […]